Tag Archives: Capitalism

I have written in a previous blog about our modern world’s propensity to rank and monetise all that is of human interest (https://johnhtfrancis.wordpress.com/2014/03/08/capitalism-and-social-information). Equating intangibles with money is no modern invention; even barbaric societies in Europe around two thousand years ago used to price life and settle blood feuds with money. Nevertheless, the degree of practice across cultures in our days is quite clearly a by-product of ubiquitous modern consumerism. Education, which association with higher purpose is enshrined in the minds of most of us, is not immune to this trend. Capitalism on the whole is an effective economic system, or rather family of economic systems; there are however areas where raw capitalism should not belong, and one of them is, in my opinion, education. Education’s first mission, above any other, is the advancement of knowledge, technology, and understanding.

In theory, education provides individuals and groups with knowledge and skills, and educated people employ in practice some of what they have acquired in order to derive various benefits, including monetary ones. Only, there has been a growing twist: education has been increasingly used as a way to rank both people and institutions and then distribute income accordingly, often in a quite detached manner from actual utility. In other words, an implicit ranking through education is being used to entitle people and institutions to a certain slice of the economic pie. Now this fact may not matter much for those blessed with inherited wealth and are therefore financially independent, but for most people, it is a consequential mechanism. Worse still, social ranking happens among ones who have the same vested interest, giving all of them a false sense of importance. There is nothing wrong in having a selection process and in attributing merit based on selection, but it all depends on how the selection is made and on the nature of the merit given.

The long-term damage from practices and perceptions centred on social ranking, and behind it money, can be great. Bluntly put, when the purpose of those giving and seeking education becomes just that of acquiring higher social status in order to make money out of it or obtain larger grants than the next institution in line, then the long-term effect can be terrible. It is the typical case of short-term, complacent and self-serving behaviour leading to long-term degeneration of general utility. The malpractice in education, so to say, is both at the institutional and broader social levels. It concerns the modes by which many academic institutions operate; the ways by which societies interpret educational curriculums and ‘brands’; and the transmitted attitudes to young minds. I am not attempting to bash some prestigious institutions to which I was not able to have access – on the contrary, I was there.

Universities and research centres compete based on number of publications, rankings in journals, and calibre of professors, among others. I dare say that such metrics all have questionable relation to actual epistemological and technological merits. Research centres equally aim to attract certain economic benefactors; it does not take much to reckon the type of publications that they may favour in such a setup. The practice of appealing to particular third party interests is well utilised in business schools (most of them split hairs to get differentiated), but the situation is far from being limited to business education. Even when there are technological benefits from institutional publications, they often focus on ‘low-hanging fruit’ type of technologies rather than ambitious and risky long-cycle ones. And in educational systems where money prevails or where student selection is less meritocratic, these types of practices are arguably worse.

Is education primarily for the betterment of the individual or is it for chasing bigger money? For most people, the answer seems to be the second one. The ironic fact is that while traditional education provides on aggregate those who have it with above-average money, it is rarely the right path towards the ‘big money’ for which they long. Moreover, curriculums and schools become, based on some vague generalisations, brands to use when suitable for the purpose of more income. The media and entertainment industries add their own perceptions too; we see movie stars wearing the jerseys of a handful of Ivy League schools and reporters quoting some university as if it holds the monopoly of knowledge. As a result, flocks of students travel every year from aspiring nations to American and European universities, with their parents’ hard earned savings, principally to add these brands to their resume. Learning from professors with more knowledge and experience; building a network of mutually synergistic relationships among colleagues; and striving to be among the few who make the cut in a certain field, all are commendable objectives. Only, they are the beginnings of an educated life and not an eternal guarantee of economic entitlement. Rare are the people who follow through with consistent and continued effort.

It is no surprise that many of the inventors of new business and financial paradigms have been school dropouts or individuals who have taken distance from the educational establishment. Some of such inventors are in fact plain anarchists. Societies like to praise high risk & return behaviour, but the reality is that, with a few exceptions, social structures force most traditionally educated individuals into low-to-medium risk & return. Masses are sorted into income distribution systems based on their type of education; it is a vision comparable to the socioeconomic model that the old barons of industries, who were incidentally founders and benefactors to many of today’s reputed institutions in the US, had imagined.

The silver lining may be that an alternative is possible today. In older times, knowledge was indeed more centralised and localised; it is however more accessible now outside traditional systems, remotely and in a distributed manner. Gaining knowledge by those who wish to look for it can cost less than in previous times, and a great deal of it is in fact free. One is not required to pay hefty fees; sincere effort and motivation are that which is most needed. Indeed, people pay the hefty fees more for the social ranking and the branding rather than the actual knowledge.

The key question remains, if you had all the money and luxuries in the world, would you still think it worthy to seek an educated life?

The 20th century witnessed the triumph of Capitalism as the standard of economic doing. With the fall of communism and the gradual transition of ‘socialist’ economies towards more ‘capitalist’ ones ended, in the mind of many, the era of economic experimentation. The victory of Capitalism was indeed a net one: it proved to be the most resilient of the ways of economic doing experimented with thanks to its dynamic, adaptive nature; a clearer accountability in it; and a special effectiveness in ultimately correcting complacency and inefficiency. We refer to Capitalism as a standard of economic doing more so than an economic system simply because, the common opinion to the contrary notwithstanding, there are many different capitalist systems possible, and the economic outputs of such capitalist systems can be distinctly different from each other. However, all capitalist systems include the following features: private ownership of society’s productive assets; a market-based exchange system for products and services with a large degree of freedom (although not a complete freedom); and, of course, the notion of capital itself, of equity and of debt, and the associated notions of money and interest.

Towards the end of the 20th century, the triumph of Capitalism was lauded by most. Its proponents, especially in the United States, went on further ‘colonising’ with it all possible social aspects; for most, almost everything in society became subject to Capitalism. Under this extended capitalism, every notion became a product or a service that is produced and can be traded. Only, this ‘over-colonisation’ of Capitalism poses grave risks in many areas, the most important of which is the transformation of ‘information’ into commodity. But before we continue further, it is important to clarify that we are talking here about information in the social context and not at a more fundamental level of nature. We are talking about information as received, emitted, and traded between different social agents in an economy or in a society. It is ‘social information’ that is becoming a commodity with this over-colonisation of Capitalism.

Today, social information suffers from the major ill of becoming a simple commodity. What we mean to say by this is that a piece of social information is not weighed any longer by its moral impact, but only by how much money it is capable of generating. The quality of social information faces a grave risk of erosion because of this. We live in a world where many news agencies and agents dealing with social information are unfortunately more interested in information that provides ephemeral crowd attention (and hence attracts advertisement money) or pleases certain political constituents (and hence attracts backers money). We also live in a world where websites are ranked and monetised not based on their social and moral utility, but simply based on their traffic numbers, regardless of the ultimate informational content behind. A reality program becomes more valued than stories of human rights abuses simply because they entertain more and are more ‘easy’ – this is what happens when social information becomes a simple commodity.

Capitalism can make us – as much – more stupid or more smart, more destructive or more constructive. The limits of Capitalism are typically decided outside it and are not made subject to it, and this is greatly done through attributing to social information the proper moral weight they deserve. Karl Marx considered that men became objects under Capitalism and that Capitalism dehumanises them. I do not agree with Marx as I do not see how we cannot say that every social science that considers humans in aggregates, including sociology, which Marx co-founded, does not somehow look at humans as units and so in a certain way dehumanises them. Capitalism is an effective way of economic doing provided that we are clear on the boundaries within which it should be allowed to operate. However, we do retain from Marxism this idea of Objectification but in a more limited manner: Capitalism should not be allowed to commoditise all types of information, to commoditise Morality. Moral ideas should not be transformed into objects that can be traded according to the capitalist way of doing, as this would ultimately lead to Capitalism destroying itself from within. As we know, Capitalism can itself lead to monopolies and to ultimate market failures if not properly governed by Law and Morality.